With the United States economy weakening in the first quarter of the year, worries of a probable recession emerge. In fact, GDP fell by 1.4% in the third quarter, the first time it has fallen since the outbreak of the epidemic.
Furthermore, with persistent market challenges such as inflationary pressures and concern about the Ukraine crisis, investors may be seeking safer areas of the stock market. As a result, pharmaceutical stocks might be a good bet right now. Pharmaceutical stocks are a subset of the healthcare sector. And, since health care is a need, demand for health care goods and services will persist regardless of the economy.
Given the current state of the pharmaceutical business, here are four prominent pharmaceutical stocks to keep an eye on in the market today.
The Psychedelics Medicine Industry
When you first think about it, the most obvious answer to why we should pay attention to the psychedelic stock market is because of what’s going on right now. We have a worldwide epidemic of depression and anxiety.
We have an international crisis of substance addiction. And we have a looming problem of old people dying of dementia that no one wants to face. These things aren’t going away any time soon, and they’re only getting worse.
This is exactly the kind of landscape that psychedelics are perfect for—their therapeutic properties can help deal with these issues in an innovative new way. Another reason why it’s important to be aware of the psychedelic stock index is that it shows the potential for a trend that could transcend generations.
Pfizer Inc. (PFE)
Pfizer is one of the most successful and biggest pharmaceutical corporations in the world, with their headquarters located in New York City. Pfizer was established in 1849, and its stock price has been included in the Dow Jones Industrial Average stock index continuously since 2004.
Pfizer’s stock price has been recognized as a benchmark for increasing pharmaceutical company shares. Pfizer produces and sells medications and vaccines for inflammatory and immunologic disorders, as well as uncommon diseases, across the globe.
This blue-chip stock is one of the most popular biotech stocks among traders since it has a history of paying dividends and has prospects for the firm to develop while also increasing its income. The Pfizer-BioNTech vaccine, which has been demonstrated to be 95% effective against Covid-19, was the first to be licensed for distribution in the UK in December 2020.
Johnson & Johnson (J&J)
Size counts when it comes to pharmaceutical stocks. New medications take a long time to create and cost a lot of money. This offers the sector’s major players a competitive edge. With a market valuation of about $437 billion, Johnson & Johnson not only has strong enough funds to weather the obstacles presented by failed pharmaceuticals, but the company also has an established worldwide network that guarantees its successful products maximize their economic potential.
Existing medications with proven income sources, such as Stelara, Tremfya, Darzalex, and Erleada, have the potential to be refined and improved upon via additional R&D. During the pandemic, the JNJ Covid-19 vaccine study boosted its chances, and the company is presently involved in 50 additional late-stage clinical testing studies.
Merck
Merck, a worldwide pharmaceutical business, is next on the list. It has been a market leader for almost 130 years, bringing numerous life-saving medications and vaccines to millions of people. It is also at the forefront of research to prevent and cure illnesses that affect both humans and animals.
Cancer, infectious illnesses, and developing animal diseases are examples of this. MRK stock has increased by more than 25% in the last year. Merck published first-quarter financial results that were well above average profit and sales projections.
The company’s sales for the quarter were $15.9 billion, up 50% from the previous year and above expectations of $14.68 billion. Molnupiravir, the company’s Covid-19 therapy, accounted for 20% of the company’s first-quarter sales. In terms of profitability, Merck earned $4.31 billion, a 57% increase from $2.7 billion in 2021.
As a result, profits per share were $2.14, an 84% year-over-year gain that outperformed analysts’ expectations of $1.83 per share. Merck boosted its 2022 profits target to between $7.24 and $7.36 per share on sales of $56.9 billion to $58.1 billion. Should you purchase MRK shares after such a strong quarter?
Final Words
It’s difficult to look away from the pharmaceutical business since the products and services offered by pharmaceutical companies are indispensable. Any complacency about the significance of the services they provide has been shattered by the Covid epidemic.
With initial excitement about the pharmaceutical industry beginning to wane, this year may be an excellent time to invest in the sector. Now is as good a moment as any to diversify your holdings by purchasing pharmaceutical stocks, given how cheap they currently are.
